Costello slams Future Fund 'shemozzle'

Peter Costello says the federal government has damaged the Future Fund's reputation with the "shemozzle" surrounding David Gonski's appointment as chairman.

Labor this week appointed Mr Gonski to a five-year term as chair, even though the prominent businessman has himself advised the government in a secret report that the fund's board of guardians wanted Mr Costello for the role.

Mr Costello established the $90 billion sovereign wealth fund towards the end of his 11 years as federal treasurer and he now sits on its board.

His Liberal colleagues have complained bitterly about the government's refusal to give him the chairmanship.

Mr Costello said he believed the process had been severely compromised.

"I think that the process has been a shemozzle," he told ABC television on Thursday.

"I think the way in which this was handled has harmed the reputation of the Future Fund."

Mr Costello denied that his comments were sour grapes for missing out on the plum posting.

"The government can appoint whoever it likes."

Mr Costello said he had high regard for Mr Gonski, but questioned whether he should have been eligible for the role given he was the one commissioned to ask the board for their views about who should replace outgoing chairman David Murray.

"Having got the confidence of the board don't you think he should have ruled himself out as a candidate?" Mr Costello said.

Former prime minister John Howard earlier joined senior Liberals in attacking the government's handling of the issue.

"If the Liberal party wants to repudiate the press releases that the shadow treasurer and shadow finance minister issued and go on a 'Jobs for Liberals' campaign, then so be it," she told parliament during question time.

Labor frontbencher Stephen Conroy was scathing of Mr Costello.

"I tell you what, I'd rather put my money under the control of David Gonski any day of the week ahead of Peter Costello."